Major car makers cut prices in Pakistan

Pakistan Suzuki Motor Company (PSMC) and Indus Motor Company (IMC) have reduced the prices of their vehicles effective from July 1, 2011.

The prices have been cut on account of government’s budgetary measures to reduce the General Sales Tax (GST) by one percent and abolish Special Excise Duty (SED) which was collected at the rate of 2.5 percent.

Local manufacturers have decided to pass on the reduction of GST and SED to the consumers.

An IMC spokesperson said that it has lessened the prices effective from July 1 on Toyota Corolla and on its double cabin 4X4 on account of reduction in GST and SED.

But the price of Daihatsu Cuore has not been cut due to the cost pressure. The industry had been absorbing the ever-increasing input costs for many months, he said.

The price of Toyota Collora Xli and GLi variants has been trimmed by Rs25,000, Toyota Corolla Altis all variants by Rs35,000 and double Cabin 4×4 by Rs50,000.

PSMC has also reduced the prices by Rs14, 000 to Rs37,000 on its different cars from July 1. H M Shahzad, Chairman, All Pakistan Motor Dealers Association (APMDA), said that IMC failed to bring down the price of Daihatsu Cuore, while PSMC has reduced the prices on all its variants. IMC is hesitant to cut the price of Cuore which is used by the middle income group, he said.

He said that Honda is also set to lower the prices by Rs25,000 on Honda City and Rs40,000 on Honda Civic from July 1.

Furqan Punjani, an analyst at Topline Research, said that this reduction in the prices is merely to pass on the government’s budgetary measures of reducing GST and abolishing SED.

Punjani said that buyers had slowed down the booking of new cars as they were waiting for the prices to fall.†He said that last time when prices were increased by IMC, the price of Cuore was not raised due to the high demand for it then because PSMC was having issues with its CNG kits and had suspended its CNG version for some time. The buyers opted for Cuore as a substitute to Suzuki Mehran and Alto, so IMC chose not to raise its price to take advantage of the vacuum in the market, he said.

Due to the unprecedented strengthening in the yen, which is at a 15-year high against major currencies, imported CKD and even local vendor parts have become costlier. This is because most of the raw materials of vendors are imported. The News